TORONTO, ONTARIO--(Marketwired - Sept. 4, 2014) - Galantas Gold Corporation (the Company) (TSX VENTURE:GAL)(AIM:GAL) is pleased to announce the filing of a revised estimate of gold resources, economic study, planning and environmental update on its wholly owned, Omagh Gold Mine in Northern Ireland. The report (Galantas 2014) is to be available on www.sedar.com and www.galantas.com.
The revised estimate of resources is written in compliance with the Pan European Reporting Code (PERC), Canadian Institute of Mining, Metallurgy and Petroleum (CIM) standards and Canadian National Instrument (NI) 43-101.
||RESOURCE ESTIMATE : GALANTAS 2014
CUT-OFF 2 g/t Au
|Minerals Resources that are not Mineral Reserves do not have demonstrated economic viability.
Overall there has been a 19% increase in resources since the Galantas 2013 Resource Report (reported 12th June 2013) and a 60% increase in resources since the 2012 Resource Report by ACA Howe International Ltd (reported 3rd July 2012). The increases since 2012 largely relate to the Kearney and Joshua veins, since this is where the drilling program has been concentrated. The drilling program was mainly designed to focus on increasing the quantity of Measured and Indicated resources on these two veins, to support potential bank funding opportunities for the financing of production. The resources are calculated at a cut-off grade of 2 g/t gold (Au), numbers are rounded, gold grades are capped at 75 g/t gold and a minimum mining width of 0.9m has been applied.
Measured and Indicated resources on Kearney vein have increased to 100,545 ounces of gold (2014) from 69,000 ounces (2012). Measured and Indicated resources on Joshua vein have increased to 67,739 ounces of gold (2014) from 15,800 ounces (2012). The Kearney and Joshua veins are the early targets of underground mining. Combined Measured and Indicated resource category on these two veins are estimated at 168,284 ounces of gold, with 293,918 ounces of gold in the Inferred resource category. Both vein systems are open at depth.
The economic study includes use of Measured and Indicated resources with a restricted portion of Inferred resources, estimated for two veins (Joshua and Kearney veins). The Inferred resources (which have lower statistical support than Measured or Indicated Resources) are contiguous with Measured or Indicated resources and / or lie within scheduled mining areas. The use of Inferred resources, in a restricted qualifying manner, is permitted by the PERC code in regard to economic studies but is excluded within NI 43-101, except within a "Preliminary Economic Assessment (PEA)". In compliance with the disclosure requirements of NI 43-101, it has been determined that the economic study including associated inferred resources is deemed a Preliminary Economic Assessment. PERC is an approved code in respect of NI 43-101. As part of PERC requirements, a comparative Feasibility study is included in the detailed technical report which does not include Inferred resources and also includes studies on sensitivity to gold price.
In compliance with NI 43-101 2.3.3(a) " the preliminary economic assessment is preliminary in nature, that it includes inferred mineral resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty that the preliminary economic assessment will be realized."
RESULTS OF THE ECONOMIC STUDY
The total of scheduled Measured and Indicated ounces utilised within the mining study is 104,627 ounces. The Inferred resources scheduled in the economic study are estimated at 60,635 ounces. Total Inferred resource estimated on the Joshua and Kearney orebodies is 293,918 ounces of gold. The amount of Inferred resources included in the economic estimate amounts to 20.6% of the total Inferred resources estimated on these veins. Were Inferred resources excluded within the mining plan, approximately 1 year would be removed from the estimate of mine life and annual output would be reduced.
|LOM Capital Expenditure
|Capital Excluding Leasable Equipment
|Capital Leasable Equipment
|GRAND TOTAL (UK £)
|CDN$ TOTAL (1.83 CDN/£)
|LIFE OF MINE CAPITAL EXPENDITURE SUMMARY
|* Working Capital includes payment delay for concentrate, VAT pre-payment and 10% contingency
|Gold Price £750/oz
|Cash flow (UK£)
|Cash flow (1.83CDN/£)
|OPERATING CASH FLOW AT AN AVERAGE GOLD PRICE OF UK£750 PER OUNCE
At a gold price of UK£750 / ounce (USD$1260 at $1.68/UK£), the pre-tax operating surplus after capital expenditure estimates an Internal Rate of Return of 72% and, at an 8% discount rate, a net present value of approximately UK£14.5m (CDN$26.6m) and a cash cost of production of UK£394 per ounce (USD$662 at $1.68/UK£). The study scheduled approximately 36% of the combined resources identified on the Kearney and Joshua veins.
The Technical Report (Galantas 2014) was prepared by the Galantas Gold Corporation Geological and Mining Team under the supervision of R. Phelps C.Eng MIMMM (President & CEO, Galantas Gold Corporation), a Qualified Person for the purposes of NI 43-101 and the AIM Rules, who has reviewed and approved this release.
The Company is pleased to announce Mr. Phelps will be presenting at the One2One Proactive Investor Forum, The Shelbourne Hotel, St Stephens Green, Dublin, between 6pm and 8pm on the 8th September 2014. Members of the Galantas Geological and Mining Team will also be in attendance and questions on the Technical Report or other matters are welcomed.
The report details the excellent progress made in the identification of fault associated gold trends within new licence areas to the North-West and West of the Omagh Mine licence area. The Company is excited about the strong potential of these areas but has determined that it must focus on near-term opportunities to enable early cash generation. As a result of this decision, the Company is engaged in re-structuring licence ownerships (within the company group) to allow for joint venture opportunities to accelerate exploration of the new licences.
The Company is advised that the application for consent for passing bays on the public road was approved by Omagh District Council Planning Committee on 2nd September 2014.
The Company looks forward to a positive determination by the Minister of Environment regarding the application for an underground mine below the present open pit.
CONTINUED POSITIVE ENVIRONMENTAL COMPLIANCE
The Company notes continued compliance with strict environmental standards set by the Northern Ireland Environment Agency (NIEA).
Roland Phelps, President & CEO, Galantas Gold Corporation, commented, "The Technical report is comprehensive detailed disclosure of our geological, mining and economic studies. It demonstrates the excellent potential of an underground mine at Omagh. Planning permits approach the final stage of determination and we are looking forward to building a sound business that will provide secure local jobs within a safe environment. Taking operations underground allows production from a substantial gold resource that we expect will continue to reveal itself, by underground drilling, as much larger than we have already demonstrated. We are expecting to build the underground operations to an initial target of around 32,000 ounces per year, based on what we already know, increasing as additional resources are identified. Our ownership of an existing processing plant, tailings facility and land package is a considerable advantage in terms of minimising the capital required and we expect to make full use of these assets."
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS: This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws, including resource estimates, economic estimates and technical studies, for the Omagh Gold project. Forward-looking statements are based on estimates and assumptions made by Galantas in light of its experience and perception of geological interpretation, historical trends, current conditions and expected future developments, as well as other factors that Galantas believes are appropriate in the circumstances. Many factors could cause Galantas' actual results, the performance or achievements to differ materially from those expressed or implied by the forward looking statements, including: gold price volatility; discrepancies between actual and estimated production, actual and estimated metal grades and geologically interpreted widths, actual and estimated metallurgical recoveries; actual and estimated costs; mining operational risk; regulatory and permitting restrictions, including environmental regulatory restrictions and liability; risks of sovereign involvement; speculative nature of gold exploration; dilution; competition; loss of key employees; additional funding requirements; planning and other permitting issues; and defective title to mineral claims or property. These factors and others that could affect Galantas's forward-looking statements are discussed in greater detail in the section entitled "Risk Factors" in Galantas' Management Discussion & Analysis of the financial statements of Galantas and elsewhere in documents filed from time to time with the Canadian provincial securities regulators and other regulatory authorities. These factors should be considered carefully, and persons reviewing this press release should not place undue reliance on forward-looking statements. Galantas has no intention and undertakes no obligation to update or revise any forward-looking statements in this press release, except as required by law.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Galantas Gold Corporation Issued and Outstanding Shares total 76,697,156.